Three guilty in UK of rigging key Libor rate

A LONDON court on Monday

(4) convicted three former Barclays

bank employees for manipulating

a key interest rate

in the third trial over the Libor

rigging scandal.

Jay Merchant, Jonathan

Mathew and Alex Pabon were

found guilty at London’s Southwark

Crown Court of rigging

Libor, the benchmark interbank

lending rate and a key

reference for financial products

globally, between June 1, 2005

and August 31, 2007.

Another banker, Peter Johnson,

had already pleaded guilty

and all four will be sentenced

on Thursday (7).

“Whilst employed by Barclays,

the convicted defendants

conspired with each other and

other individuals…intending to

prejudice the economic interests

of others,” the Serious

Fraud Office (SFO) said in a

statement.

Two former colleagues of the

convicted bankers, Stylianos

Contogoulas and Ryan Reich,

also stood trial but the jury was

unable to reach a verdict in

their cases. The SFO has 14 days

to consider whether to ask for

a retrial.

US/British citizen Merchant

45, was convicted unanimously,

while Briton Mathew, 35, and

American Alex Pabon, 38, were

found guilty by a majority decision.

The two men told the

court their actions were sanctioned

by bosses.

“The trial in this country of

American nationals also demonstrates

the extent to which

the response to Libor manipulation

has been international

and the subject of extensive cooperation

between US and UK

authorities,” said SFO director

David Green.

Libor, or London Interbank

Offered Rate, is a global benchmark

that is calculated daily,

using estimates from banks of

their own interbank rates.

It underpins the terms of

$500 trillion of contracts from

mortgages to the cost of corporate

lending.

The men were accused of

submitting unrealistic figures

during the height of the 2008

financial crisis, boosting their

earnings at the expense of their

counterparts.

The scandal erupted in 2012

when Barclays was fined £290

million by British and US regulators

for attempted manipulation

of Libor and Euribor interbank

rates between 2005 and

2009. Euribor is the eurozone

equivalent of Libor.

Royal Bank of Scotland, Swiss

lender UBS, Rabobank and broker

Icap have also received

heavy fines over the scandal.

This was the third British trial

over the scandal.

Tom Hayes, a banker who

worked for UBS and Citigroup,

was last year sentenced to 14

years in prison, reduced to 11

years on appeal.

A second trial resulted in the

acquittal of six city workers earlier

this year.